A New Tool for Covering Risk in Agriculture: The Revenue Insurance Policy

Angelo Frascarelli, Simone Del Sarto and Giada Mastandrea
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Angelo Frascarelli: Department of Agricultural, Food and Environmental Sciences, University of Perugia, 06121 Perugia, Italy
Simone Del Sarto: Department of Statistics, Computer Science, Applications “G. Parenti”, University of Florence, 50134 Florence, Italy
Giada Mastandrea: Department of Agricultural, Food and Environmental Sciences, University of Perugia, 06121 Perugia, Italy

Risks, 2021, vol. 9, issue 7, 1-16

Abstract: Over the last years, the agricultural sector has faced increasing risks related not only to production activities, but also to climate adversity and a higher frequency of extreme events. These factors, combined with increased price volatility in the markets, have caused greater exposure to risk for farmers. For this reason, risk management in agriculture has taken on an important role within the Common Agricultural Policy. However, in recent years, gradual disaffection of farmers, low penetration of insurance in the arable sector, and a greater need for insurance coverage against market risks have characterised the subsidised risk management system. For all these reasons, starting in 2017, the National Agricultural Insurance Plan has provided new possibilities for covering risks. This paper aims to contribute to the debate on risk management linked to the revenue insurance policy recently adopted in Italy. Using data from the Italian Farm Accountancy Data Network, we simulate the application of the revenue insurance policy with a sample of Italian farms operating in the common and durum wheat sectors. The main findings show that the revenue insurance policy stipulation is, overall, sustainable for both farms and insurance companies.

Keywords: risk management system; revenue insurance policy; common agricultural policy; Farm Accountancy Data Network (search for similar items in EconPapers)
JEL-codes: C G0 G1 G2 G3 K2 M2 M4 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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